The IMF/World Bank annual meetings have now concluded in Washington, apart from a few seminars and cocktail parties. Below are brief reports on the three subjects we were most concerned with, followed by news articles on each of them.

1. Developments on Debt

We’ve been reporting on this listserv about recent negotiations among the G7 countries on debt, including a proposal to provide 100% multilateral debt cancellation for about 30 of the most impoverished and indebted countries. The issue was on the agenda of the Group of 7 Finance Ministers’ meeting, which as usual immediately preceded the formal meetings of the IMF and World Bank. It was commonly acknowledged that this was the crucial forum - ratification by the institutions’ boards would be assured if the G7 agreed on a proposal; if it did not, the issue was unlikely to be discussed seriously.

The U.S. was supporting a plan to accomplish the cancellation without needing to raise additional money from donors). Instead the IMF and World Bank would balance their books by drawing on various funds they control, including those designated for low-interest loans to the most impoverished countries. The U.K. was supporting a plan that called for new allocations by each of the G7 countries, a challenge which Japan, Germany, and the U.S. were very unlikely to meet. The U.K., however, pushed for sale of IMF gold reserves as a way to satisfy those who wanted to be sure that cancellation would not impair the institutions’ finances. The U.S. said that might be a good option. Despite a study showing that gold sales would be painless for all involved, governments like Canada and Germany were not convinced.

The 50 Years Is Enough Network (http://www.50years.org)supported doing whatever it took to get to the 100% cancellation, largely because an international agreement on that would be a major precedent-seeking achievement, and could be a first step to restoring desperately-needed resources to those who most need them, and to free Southern governments from the dictates of the IMF and World Bank. Sales of IMF gold would be very acceptable to us, and likely to satisfy the most parties (which is not to suggest that those parties were waiting to hear what our position would be).

We, along with many others (including other G7 governments), assume that the U.S.’s motivation in proposing 100% debt cancellation is, at least in part, the desire to persuade the French and others to make concessions on debt relief for its puppet state in Iraq. U.S. negotiators insist the two issues are not related, but the French have done a good turn in insisting that any talk of debt reduction for the Iraqis is off the table if the HIPC (low-income) countries are not dealt with also. That said, it now appears that the French might be resisting going along with any proposal made by the Bush administration - understandable, but in this case perhaps counter-productive.

So, the G7 finance ministers failed to reach an agreement. We don’t know what all the circumstances were - whether it was British Chancellor (Finance Minister) Gordon Brown’s penchant for seeking credit and publicity, the French government’s refusal to do anything with Bush, the German/Japanese reluctance to see any new resources devoted to debt relief, the Bush administration’s high-handedness, or Canadian and others’ discomfort with gold sales (out of a misguided fear that their gold industry would be negatively affected) - or some combination of these.

We are of course disappointed that the G7 communique contained all of two sentences on debt, with only vague pledges to study the issue further. The IMF/WB meetings, which immediately followed offered no further news on debt.

The good news is that the issue became quite prominent - indeed, it was the main issue the media focused on at these meetings. We were pleasantly surprised that Treasury Secretary John Snow made clear statements about the need for and viability of plans to cancel 100% of impoverished country multilateral debt. That Gordon Brown, the chair of the IMF’s policy-making committee, devoted so much attention to the issue - making a major speech the week before the meetings with a counter-proposal to the U.S.’s, and saying after the Finance Ministers’ meeting that he felt an agreement, including gold sales, was just “weeks away” - is also encouraging. Brown’s government (U.K.) seems determined to make development a central theme of the G8 summit it is hosting in June 2005, and UK NGOs are gearing up to make debt a signficant focus.

A few weeks ago we viewed this past weekend’s meetings as perhaps a unique opportunity to make significant progress toward the goal of 100% debt cancellation. We’re unhappy with the result, but mollified somewhat by the attention the issue received. It seems more possible now that the issue will not go away, and G7 governments will remain under pressure to make substantial progress soon. That means a lot of work for campaigners, so you’re likely to be hearing more and more about debt in the weeks and months to come.

The collection of news articles below includes a message and press release from the Jubilee USA Network with further details. The 50 Years Is Enough Network and Jubilee worked closely on this issue over the past months, and will continue doing so.

2. Developments on Expansion of IMF Powers

The encouraging remarks by Snow we mention above were not without their flip side. In the same speech, he spoke about his hopes that the G7 finance ministers and IMF/WB could agree very soon on the creation of a new facility - the Policy Monitoring Agreement - which would offer to certify countries’ economic programs in the absence of actual IMF lending. In the run-up to these meetings we had heard reports that the U.S. proposal for 100% debt cancellation might include a provision like this. Our fear was that this would formalize the IMF’s “gate-keeper” function, which is the root of the IMF’s power. The IMF, in essence, is looked to by other creditors and aid agencies to provide a seal of approval; without it (usually meaning a formal IMF lending program that has not gone “off-track” because of the country’s failure to adhere to IMF rules), the country finds it difficult, if not impossible, to get credit or capital from any other multilateral, bilateral, or private source. Because one of the main reasons we advocate debt cancellation, in addition to recovering resources for vital needs, is the imperative of liberating governments from IMF control of their economic policies, we worried that such a facility could have the effect of preserving the IMF’s gate-keeper role even if the IMF no longer had substantial funds to lend. It would probably mean that every bit of aid would be explicitly conditioned on the IMF’s on-going approval of a country’s policies.

The proposal was brought up at the meetings, but all news reports that mention it indicate that it was subjected to a hostile reception from the whole range of developing countries. This of course is not always enough to deter the G7, but it appears to have at least stalled the proposal for now. It may appear again as talks on debt cancellation continue.

3. Rally & Vigil Events

U.S. activists decided back in November 2003 that the primary mobilization on the IMF/WB in 2004 would be for the spring meetings in April, where we turned out about 3000 people for a rally and march and other events. Our plans for the fall meetings were low-key: small rallies focused on the debt talks at the G7 finance ministers’ meeting, and an overnight vigil in the park outside the World Bank. The Friday rally, sponsored by Jubilee USA Network, at the Treasury Department (where the ministers were meeting) attracted about 120 people, and the vigil, which 50 Years took the lead on along with Religious Working Group on the World Bank and IMF, Jubilee, and Pax Christi DC, and which started soon afterward and continued for 27 hours attracted about that number over its length. There were liturgies and speeches on both days at 4 pm, and a handing over of thousands of postcards demanding debt cancellation to a World Bank official on Saturday morning.

A lot of press stopped by over the period of the vigil. At its lowest point - a torrential rain at 5 am Saturday - four people valiantly protected the groups’ literature, placards, etc.

The Washington events were part of coordinated events around the world for the week (plus) of actions called for October 1-12. News on events in other countries can be found at (www.ifi-out.org).

Copyleft

RSS 2.0 | Website hosted by Domaine public | under Free software SPIP |